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1、1 Quantifying the Carbon Savings of Circularity:Mobile Phones and Network Equipment Guidance for Telecommunications Operators Copyright 2025 GSMA February 2025 2 The GSMA is a global organisation unifying the mobile ecosystem to discover,develop and deliver innovation foundational to positive busine

2、ss environments and societal change.Our vision is to unlock the full power of connectivity so that people,industry,and society thrive.Representing mobile operators and organisations across the mobile ecosystem and adjacent industries,the GSMA delivers for its members across three broad pillars:Conne

3、ctivity for Good,Industry Services and Solutions,and Outreach.This activity includes advancing policy,tackling todays biggest societal challenges,underpinning the technology and interoperability that make mobile work,and providing the worlds largest platform to convene the mobile ecosystem at the MW

4、C and M360 series of events.We invite you to find out more at .epi Consulting is a leading UK-based sustainability consultancy focused on improving environmental and social outcomes within global supply chains.The epi team has been delivering emissions reduction,life cycle assessment(LCA),eco design

5、,circular economy,responsible sourcing and supplier engagement projects global corporate clients for more than 15 years.We invite you to find out more at epiconsulting.co.uk Acknowledgements The GSMA and epi Consulting would like to thank the members of the GSMA Circular Economy for Mobile Devices P

6、roject Group as well as experts from the following organisations for their contributions and insights,without which it would not have been possible to develop this guidance:Adtran AT&T BT Group Cisco Ericsson MTN Nokia Orange Proximus Sagemcom Telefnica Telstra Vodafone Authors:Alan Riley(epi Consul

7、ting),Alistair Spear(epi Consulting).GSMA contributors:Steven Moore,George Kamiya.3 Table of Contents Key Questions Addressed by this Guidance 5 How To Use This Guidance 9 1.Background 11 1.1 What This Guidance Covers 11 2.The Standards and Guidance Landscape 13 2.1 Organisational-Level Standards an

8、d Guidance 14 2.2 Product-Level Standards and Guidance 14 3.Defining Circularity in the Context of Carbon Accounting 15 3.1 Product Refurbishment 15 3.2 Device Repair Services 15 4.Industry Challenges in Carbon Accounting for Circularity 16 5.Carbon Accounting Approaches 18 5.1 Scope 1,2 and 3 Inven

9、tory Accounting 18 5.2 Project-Based Accounting 18 6.Inventory Accounting:Scope 1,2 and 3 Impacts of Circularity 19 6.1 Key Considerations When Using Inventory Accounting 19 6.2 Practical Application of Inventory Accounting 23 7.Project-Based Accounting:Avoided Emissions of Circularity 28 7.1 Key Co

10、nsiderations When Using Project-Based Accounting 29 7.2 Practical Application of Project-Based Accounting 30 8.Setting Boundaries When Calculating Savings 33 8.1 Standards and Guidance on Boundary Setting 33 8.2 Setting Boundaries within Circular Scenarios 33 9.Allocating Embodied Emissions Across P

11、roduct Use Cycles 35 9.1 Potential Allocation Approaches 35 9.2 Assessment of Allocation Approaches 36 10.Combined Approach:Carbon Savings of Circular Initiatives 38 10.1 Calculating Inventory Reductions from Circular Initiatives 38 10.2 Reporting Inventory Savings from Circular Initiatives 41 Annex

12、 A:Worked Examples and Typical Savings 42 Introduction and Overview 42 A.1 Mobile Handset Refurbishment 42 A.2 Mobile Handset Repair 44 A.3 CPE Refurbishment 45 A.4 Active Network Equipment Refurbishment 46 4 Annex B:Appendices 48 B.1 Relevant GHGP Survey Feedback for Circular Product Carbon Account

13、ing 48 B.2 Reprocessing Definitions within Literature 49 B.3 Adjusting a Spend-Based Method in the Absence of Specific Emissions Factors 50 B.4 Ownership-Deployment Model and Inventory Accounting Results 52 B.5 Resold Active Network Equipment 54 B.6 Within-industry Project-Based Accounting 55 B.7 As

14、sessment of Allocation Approaches 56 5 Key Questions Addressed by this Guidance What aspects of circularity are covered in this guidance?There are a variety of strategies and initiatives that can increase the circularity of mobile handsets,customer premises equipment(“CPE”)and active network equipme

15、nt.These include measures to extend the lifespans of devices and equipment(for example,improving durability,providing ongoing software support,enabling repair and refurbishment),as well as actions to reduce the environmental impact of production(for example,using recycled and recyclable materials an

16、d renewable energy).At the network level,circularity can be further advanced through infrastructure sharing,modular design and energy efficient operations,which maximise equipment utilisation and resource efficiency.The guidance in this paper focuses on the refurbishment or repair of mobile handsets

17、,routers,active network equipment and other ICT products to extend their life.See 3.Defining Circularity in the Context of Carbon Accounting for more information.Refurbished products may undergo varying levels of reprocessing,from light cosmetic reconditioning to heavy remanufacturing.For practical

18、purposes,telecommunication operators(“operators”)may consider an average refurbishment scenario when specific data is unavailable.What do existing standards say about carbon accounting for refurbished or repaired ICT products?Although the literature does not explicitly address product circularity or

19、 the treatment of products with additional use cycles,it offers relevant carbon accounting guidance through two key approaches(see 5.Carbon Accounting Approaches for more information).Scope 1,2 and 3 Inventory Accounting:Inventory Accounting is an approach that quantifies actual greenhouse gas(GHG)e

20、missions associated with an organisations activities,allocating them across Scope 1,Scope 2,and the Scope 3 Categories.In the same way as newly manufactured products,significant emissions associated with repaired or refurbished products,including upstream,core and downstream activities,must be attri

21、buted within an organisations emissions inventory.Due to a relatively lower carbon impact within the production stage of their lifecycle,refurbished products typically have lower attributed embodied emissions per unit compared to newly manufactured products.This lower emissions burden can be reflect

22、ed accordingly within the inventory calculations,ideally via a specific product or supplier-level method.Inventory methods are discussed further in 6.Inventory Accounting:Scope 1,2 and 3 Impacts of Circularity.Project-Based Accounting:Project-Based Accounting,also known as consequential accounting o

23、r intervention accounting,estimates the impacts or changes in GHG emissions resulting from specific projects,actions,or interventions relative to a counterfactual baseline scenario.Within this approach,circular products can be considered to partially or fully substitute newly manufactured products,w

24、ith a counterfactual product being selected to represent the most likely product chosen in the absence of the circular option.In this case,the estimated difference in emissions between the two scenarios(Circular and Counterfactual Scenarios)can be quantified(often referred to as“avoided emissions”).

25、Note that standards require any Project-Based Accounting claims to be reported as a separate disclosure outside of the emissions inventory.6 How can operators calculate the emissions associated with refurbishing or repairing ICT products?The emissions calculation process broadly follows three key st

26、eps:1.Setting Boundaries:Clearly outline system boundaries to include the entire cradle-to-grave life cycle of the product(see 8.Setting Boundaries When Calculating Savings for more information).For circular products,this should encompass:Upstream Reverse Logistics:Emissions from product collection

27、and transportation.Reprocessing:Emissions from the reprocessing of materials and components(including sourcing additional components if necessary).Downstream Forward Logistics:Emissions associated with distributing circular products.Use-Phase:Emissions impact during the expected(usually shorter)use

28、cycle of the circular product.End-of-Life Treatment(EoLT):Consider including the EoLT of replacement components,although this stage typically has minimal impact.For simplicity,EoLT should focus on the disposal or recycling of replacement components,provided the first use cycles EoLT has already been

29、 accounted for.2.Embodied Emissions Allocation:For circular products,an allocation procedure is required to determine how,and whether,to allocate embodied emissions impacts between the first and subsequent use cycles.A cut-off approach is recommended,where the second use cycle accounts only for the

30、additional emissions from reprocessing,transportation,and the second use-phase.EoLT should be limited to the disposal or recycling of replacement components(see 9.Allocating Embodied Emissions Across Product Use Cycles for more information).3.Data Gathering:Data for circular products can be acquired

31、 at a product,supplier,or industry-average level.Emissions factors are derived at each level through physical activity data,such as product-based Life Cycle Assessments(LCAs)or economic activity data(for example circular spend combined with supplier-level emissions factors).Proxies and assumptions m

32、ay also be considered in cases of low data availability.This area is particularly relevant for Inventory Accounting and is covered in more detail in section 6.1 Key Considerations When Using Inventory Accounting.This is a general view of the calculation process,but users should note there are specif

33、ic considerations depending on the purpose of the calculation(see sections 6.Inventory Accounting:Scope 1,2 and 3 Impacts of Circularity,7.Project-Based Accounting:Avoided Emissions of Circularity,and 10.Combined Approach:Carbon Savings of Circular Initiatives for more information).How can operators

34、 realise emissions savings from refurbishment within their Scope 1,2 and 3 inventory?Inventory Accounting is an attributional approach where each reporting period reflects the footprint of products sourced and sold or deployed by the organisation within that period.Consequently,transitioning the pro

35、duct mix to a greater proportion of lower-carbon products compared to the previous year will typically result in a year-on-year reduction in the attributed emissions.Refurbishment initiatives,unless hindered by a reliance on highly emissions-intensive transportation methods(such as air freight)or th

36、e use of older models of products with more 7 negative use-phase emissions impacts,generally result in a lower-carbon product per unit,compared to newly manufactured units.Assuming the volume of products sourced remains constant,the emissions inventory figures for the products can be expected to dec

37、rease over time as operators displace newly manufactured products with refurbished products.See section 10.Combined Approach:Carbon Savings of Circular Initiatives for more information.How do operators quantify avoided emissions from refurbishment or repair initiatives?The“Project-Based Accounting”a

38、pproach can be used to calculate the emissions savings of a“Circular Scenario”versus a hypothetical“Counterfactual Scenario”,which is often expressed as“avoided emissions”(see section 7.Project-Based Accounting:Avoided Emissions of Circularity).The process is made up of four steps based on the follo

39、wing formula:Avoided Emissions=Counterfactual Scenario Emissions Circular Scenario Emissions Define the Circular Scenario:Calculate the emissions generated within the boundaries of the refurbished or repaired product(typically this includes reverse logistics,reprocessing,forward logistics,and the us

40、age emissions from the second life use-phase).Define the Counterfactual Scenario:Identify the emissions associated with a comparable product that would most likely be selected in the absence of the circular product.This is the Counterfactual Scenario and serves as a comparative scenario for analysis

41、.Calculate Avoided Emissions:Subtract the emissions of the Circular Scenario from the Counterfactual Scenario.Within the calculation,consider using a multiplier for the substitution rate,if the circular product does not perfectly substitute the counterfactual product.For example,if a refurbished mob

42、ile has an expected life of 2 years and the newly manufactured handset in the Counterfactual Scenario has an expected life of 3 years,it may be prudent to assume 1.5 refurbished units substitute 1 newly manufactured one.Communicate the Impact:Present the avoided emissions to stakeholders with transp

43、arent disclosure of the method and assumptions used.What emissions savings can operators expect from sourcing refurbished products?Typically,savings of up to 80%or more per unit can be achieved by sourcing refurbished products instead of newly manufactured products.However,the size of the saving is

44、dependent on a number of factors.Often the most important variables are the significance of use-phase emissions in the overall lifecycle and the relative use-phase impact of the counterfactual product.For example,the use-phase impact is relatively minor for mobiles but much more significant for acti

45、ve network equipment(up to 80%+of the overall life cycle footprint).If a refurbished unit is less energy efficient than the one selected as the newly manufactured product in the counterfactual baseline scenario,this can have a large impact on,or even negate,the lifecycle emissions savings.In rare ca

46、ses,refurbishment savings can also be negated by other lifecycle factors outside of the use-phase,such as when air freight is utilised to transport used products internationally to and from the refurbishment facility,incurring a large incremental carbon impact from aviation fuel.The overall savings

47、an operator may expect within the organisational-level inventory depend on the types and quantities of product refurbished,the emissions intensity of the refurbishment operation,the usage intensity of the refurbished product,the extent to which refurbished products substitute newly manufactured prod

48、ucts(the level of equivalence),and the specific measurement and allocation procedures applied to account for products within the emissions inventory.8 Please refer to the Excel Model accompanying this paper for a more comprehensive breakdown of key variables,or refer to Annex A:Worked Examples and T

49、ypical Savings for an overview of the typical savings across a selection of product categories.How can operators model the carbon savings of circularity for their specific products?Please refer to the Excel Model accompanying this paper.It allows operators to enter their own custom baselines and sce

50、narios and to model the carbon impacts of refurbishment initiatives for specific products within the mobiles,CPE or active network equipment product categories.9 How To Use This Guidance There are three primary use cases for applying the guidance in this paper:A.Accounting for Circular Products with

51、in Scope 1,2 and 3 Emissions Inventories Description:Setting boundaries,measuring and allocating the emissions of refurbished or repaired products within the Scope 1,2 and 3 inventories.Example:As part of a broader circularity program,a telecommunications operator has started offering refurbished ro

52、uters on a leasing model,replacing their previous practice of selling newly manufactured routers.They need to understand the reporting implications,including Scope 1,2,and the relevant Scope 3 Categories,in line with standards and guidance,and how this approach differs from what has been done previo

53、usly.Audience:Carbon reporting professionals responsible for regulatory and voluntary carbon emission disclosures.Relevant section of this paper:6.Inventory Accounting:Scope 1,2 and 3 Impacts of Circularity B.Calculating External“Avoided Emissions”Claims for Circular Initiatives Description:Calculat

54、ing a fair and justifiable avoided emissions claim that quantifies the impact of product repair or refurbishment initiatives,for external publication.Example:A telecommunications operator has started selling refurbished mobiles and plans to promote the initiative to customers.As part of the promotio

55、n,the company wants to quantify the carbon savings associated with refurbished mobiles.They need to understand how to calculate these savings in a justifiable way,in accordance with the relevant standards and guidelines.Audience:Sustainability communications professionals responsible for ensuring th

56、e accuracy of external claims regarding carbon savings.Relevant section of this paper:7.Project-Based Accounting:Avoided Emissions of Circularity C.Calculating the Inventory Savings from Circular Initiatives for Internal Appraisals Description:Accurately calculating how current or future refurbishme

57、nt initiatives may impact the emissions inventory,to support internal planning and decision-making.Example:A telecommunications operator is considering purchasing refurbished servers for its operations instead of newly manufactured ones.They need guidance on how to calculate the carbon benefits of t

58、his initiative,ensuring that the comparisons are accurate and comprehensive and reflect the potential impacts on the emissions inventory.Audience:Sustainability and strategy professionals or business leaders responsible for transition planning and meeting overall sustainability goals and targets.Rel

59、evant section of this paper:10.Combined Approach:Carbon Savings of Circular Initiatives 10 Figure 1 Overview of the Guidance The key concepts and messages from this paper are accessible through the links in the teal rectangles.For those seeking technical details,please refer to the pink hexagons.Wor

60、ked examples that illustrate the guidance are provided in Annex A:Worked Examples and Typical Savings.For further insight into savings calculations and to run scenarios specific to your refurbished products,note that there is an Excel Model accompanying this document that provides detailed output.Le

61、gend Technical Discussion Practical Application Technical Discussion Practical Application Technical Discussion Context Key concepts Technical detail Quantifying Carbon Savings Allocation Boundaries Project-Based Accounting:Avoided Emissions of Circularity Carbon Accounting Approaches Defining Circu

62、larity in the Context of Carbon Accounting Background Inventory Accounting:Scope 1,2 and 3 Impacts of Circularity 11 1.Background The urgent need for action on climate change,as well as other circularity-linked environmental issues such as waste,resource scarcity,pollution and biodiversity loss,is n

63、ow well understood across the telecommunication operator(“operator”)community.As of November 2024,over 150 companies in the telecommunications industry(including 62 mobile network operators)have set validated Science-Based Targets(SBTs),with a further 51 committed to do so1.These targets require com

64、panies to set stretching targets to reduce Greenhouse Gas(GHG)emissions across Scopes 1 and 2,and also Scope 3 if Scope 3 emissions represent 40%or more of their total emissions.Alongside emissions targets,16 leading operators2 representing one billion mobile connections around the world have signed

65、 up to new circularity targets3 developed with the GSMA,to increase take-back of mobiles and ensure recovered mobiles dont end up in a landfill or incinerated.The focus across the industry is now increasingly turning to how delivery of these targets can be more closely measured,planned and managed,p

66、articularly driven by emerging regulatory requirements such as CSRD Transition Plan requirements in the EU,and the emergence of guidance such as the TPT(Transition Plan Taskforce)in the UK,elements of which have been incorporated into international IFRS S2 reporting requirements.Delivery of SBTs and

67、 Climate Transition Plans require companies not only to target and reduce emissions but also to be able to reliably measure,calculate and report these emissions via their GHG inventories,aligned to accepted standards,such as the Greenhouse Gas Protocol(GHGP).To help operators calculate their invento

68、ries in line with relevant standards and guidance,in 2023 the GSMA,GeSI and ITU collaboratively developed the Scope 3 Guidance for Telecommunications Operators4,which has been widely adopted by the industry,helping to improve and harmonise assessment and reporting of Scope 3 GHG emissions across the

69、 operator community.In parallel,the GSMA Achieving Climate Targets guidance,also released in 2023,identified the significant role that the use extension of devices has to play in delivering near-term science-based targets,contributing around 7%of the theoretical reduction pathway to 1.5-Degree Scena

70、rio Targets5.1.1 What This Guidance Covers This paper provides a detailed exploration of how operators can understand,quantify and account for the impacts of circularity initiatives(including repairing and refurbishing products)on their emissions.Centred on the product categories of mobile handsets,

71、customer premises equipment(CPE),and active network equipment,it examines carbon accounting approaches,including 1 https:/sciencebasedtargets.org/companies-taking-action 2 As of December 2024:BT Group,Deutsche Telekom,Globe Telekom,GO Malta,Iliad,KDDI,NOS,NTT Docomo,Orange,Proximus,Safaricom,Singtel

72、,SoftBank,Tele2,Telefnica and Telenor.3 https:/ https:/ 5 https:/ 50 12 Inventory Accounting and the calculation of avoided emissions.By doing so,the paper provides a comprehensive framework for assessing the carbon benefits of circular practices.The paper evaluates critical methodological considera

73、tions and offers insights into current implementation practices by operators,drawing on extensive research and interview findings.It is accompanied by an Annex A:Worked Examples and Typical Savings featuring worked examples and an Excel Model,which illustrate how these strategies can lead to tangibl

74、e emissions savings.13 2.The Standards and Guidance Landscape In developing this paper,standards and guidance(“literature”)for carbon accounting were considered,encompassing both cross-industry frameworks and sector-specific approaches within the Information Communication Technology(ICT)industry.Whi

75、le standards provide formal,often mandatory requirements to demonstrate conformance,guidance documents offer practical recommendations to supplement the standards and support effective implementation.In most cases,existing literature does not specifically address circularity or the treatment of the

76、extended life of products,but they do provide relevant direction on carbon accounting approaches.Standards and guidance exist at both an organisation-level(such as the GHGP Corporate Value Chain(Scope 3)Standard)and at a product-level(such as ISO 14067).Organisation-level literature provides framewo

77、rks for carbon accounting at scale.Product-level literature demonstrates how to measure and account at a unit-level,in terms of the product life cycle.A broad overview of relevant organisational-level and product-level literature is provided below,and throughout the paper will be cited when relevant

78、,within each thematic section.Figure 2 Standards and Guidance for Carbon Accounting !#$%&$(&)%$*+I-.-*L)01O(+I-.-*!#ABCDBCEFG#HEI-G#A.ELM#1OPBDG#4R#OFEMSECSTUVWU#;?P%01(4+5S-O&7&OOFEMSECSA!-LSEMPG!OBC#a#!GOT#a#TUV#OPBDG#4#!-LSEMPG#bBC#UGIGPBcc-MLPEFLBM#dDGCEFBCA!#eCBFBPBI#ABCDBCEFG#CPPB-MFLMf#EMS#gG

79、DBCFLMf#OFEMSECS!#eCBFBPBI#bBC#eCBhGPF#CPPB-MFLMfTOd#=iW=#a#TOd#=iW?#a#TOd#=iW4jgT#ABcDECEFLkG#lcLAALBMA#TcDEPFA#Bb#eCBS-PFA!#eCBS-PF#;LbG#AmPIG#CPPB-MFLMf#EMS#gGDBCFLMf#OFEMSECSTOd#=TOd#=injoAOp eEF.bLMSGC#TCEcGrBCsTUVWU#;=#a#lUOT#lO#?4#=ttTUVWU#;lUOT#Ug#=4#ni!GOT#TAU#OGPFBC#!-LSEMPGHGCLbLGS#AECuBM

80、#OFEMSECS#eCBfCEcjoAOp#!-LSEMPG#BM#CkBLSGS#lcLAALBMA 14 2.1 Organisational-Level Standards and Guidance Organisational-level literature provides relevant information from three primary perspectives,which inform methods of quantifying and accounting for the carbon savings of circularity:Standards suc

81、h as the GHGP and the Scope 3 Guidance for Telecommunications Operators inform how emissions from circularity initiatives should feed into the Scope 1,2 and 3 emission Inventory Accounting that operators know and use today.The Project-Based Accounting approach defines how“avoided emissions”should be

82、 calculated by organisations when implementing projects such as circularity initiatives.Standards for assurance engagements on GHG statements also exist at an organisational-level and,while assurance is not a core focus of this paper,it can provide some useful input on matters relating to the interp

83、retation of standards.Operators should note that the GHGP organisational-level standards are currently under review.Some of the feedback provided in the GHGP consultation process is relevant for carbon accounting for circularity and may be acted upon in the future GHGP update,which could lead to cha

84、nges in accepted GHG accounting standards.For a summary of the key relevant areas of GHGP feedback,see Appendix B.1 Relevant GHGP Survey Feedback for Circular Product Carbon Accounting.2.2 Product-Level Standards and Guidance Product-level documentation provides relevant information on several key a

85、reas related to quantifying the carbon savings of circularity:Standards such as the GHGP Product Life Cycle Accounting and Reporting Standard provide frameworks for measuring emissions impacts at a product-level.These can feed into organisational reporting on a consolidated basis via the product-lev

86、el method.Life cycle assessment(LCA)and product carbon footprinting(PCF)methods such as ISO 14044,ISO 14067 and the industry-specific ITU-T L.1410 also provide useful instruction in this area as well as exploration of key topics for circularity,such as substitution and allocation approaches,that wil

87、l be covered later in this paper.15 3.Defining Circularity in the Context of Carbon Accounting When exploring the carbon savings of circularity,it is important to define“circularity”and how it impacts the organisational activities that factor into emissions calculations and accounting.Within this pa

88、per,the focus is on circularity initiatives that provide a product with an additional use cycle or extend the duration of use.This usually involves a level of reprocessing,which can range from a light cosmetic reconditioning to a heavier remanufacturing,such as a recertification process with the rep

89、lacement of a large number of components,testing and repackaging.Within the product-level literature,a range of reprocessing terms are defined(see Appendix B.2 Reprocessing Definitions within Literature),including remanufacturing,refurbishment,reuse,and repair.Each of these levels of reprocessing ha

90、s a different impact across two dimensions;firstly,the emissions burden incurred from the reprocessing activity and,secondly,the degree to which the reprocessing restores the product to its newly manufactured state(level of functional equivalence).3.1 Product Refurbishment Despite the wide range of

91、definitions in the literature,the industry reality is that it is often not practical for operators to account for various levels of reprocessing,due to the complexity it introduces to carbon accounting procedures,and the lack of granular data available on the treatment of each individual unit.Interv

92、iews and research on the topic suggest that it may be more practical for operators to work with an average Product Refurbishment case,reflecting an estimation of the typical impacts from remanufacturing,refurbishment,or reconditioning.It should be noted that,per the Scope 3 Guidance for Telecommunic

93、ation Operators,this case would not include“Goods that are being purchased or acquired by a telecommunication operator as new after a cosmetic refurbishment where the item has not been used are specifically excluded from reused,refurbished and repaired goods.”Per the guidance,“in this case,the produ

94、ct should be accounted for in full,including the emissions that arose from their extraction from raw materials,production and transportation associated with their original manufacture.”6 3.2 Device Repair Services The Product Refurbishment case covers the most common life extension models of selling

95、 or deploying refurbished products.However,there is one other common circular practice that is not covered by Product Refurbishment.This is the repair of a customer-owned device,for example when a mobile handset with a cracked screen is repaired as a service provided by the operator.Here,the custome

96、r brings their device to the operator who will have it repaired,generally via a third party repair partner,before it is returned to the customer.In this instance,ownership does not pass from the customer to the operator,and there is no direct“sold product”or“purchased goods”impact within the emissio

97、ns inventory.A separate case is considered within this paper for Device Repair Services.6 https:/ page 15 16 4.Industry Challenges in Carbon Accounting for Circularity Alongside the literature review,this paper has been developed with operational realities in mind.Information from mobile operators a

98、nd equipment vendors(including both OEMs and refurbishers)was collected and reviewed via two primary methods:Desk-Based Research:operator sustainability disclosures,CSR reports,press releases,and other publicly available studies,reports and whitepapers.Interviews:Held with mobile operators and equip

99、ment vendors to gain insights into the practicalities of carbon accounting and to gain their perspectives on the key areas identified from the standards and guidance.To contextualise how carbon accounting is currently performed,the research process involved gaining insight into the challenges operat

100、ors face.A summary of these challenges is provided below:Understanding the link between,and applying the principles of,carbon accounting approaches and standards to a circular initiative or use case.Aligning with industry peers to establish a unified basis for circularity calculations and methodolog

101、ical considerations.Managing internal resource constraints when designing data collection and calculation procedures for circular initiatives,considering that the proportion of refurbished products as a percentage of total products sold can be as low as 1 to 2%.Sourcing high quality data for refurbi

102、shed or repaired products,as granular,readily available data is not yet commonplace for circular products,and measurement is often based on spend-based(economic activity data)methods and/or the use of proxies.From these challenges,four key criteria were developed for assessing the suitability of dif

103、ferent carbon accounting options for circular goods:Figure 3 Criteria to Assess Carbon Accounting Approaches Accounting approaches were assessed based on the extent to which they enable simplicity and pragmatism in accounting procedures,enable alignment to standards and across industry,and incentivi

104、se circular behaviour by key actors in the value chain.!#A%&(!#A%CA()C#*C+,A-#)C.#+/-.0#0+-#,+1%0)0-#O%-3%0#)0#+*.C)-+C4#5A+*.#S#%0T.0-+C89#A+1*(.:#A)C;+0#)AA+0-%0#)%*+#I+?3.#)*C+)A3#3+(,#;.#)(%0.,#-+#ACC.0-#(%-.C)-C.#O3%(.#A()C%/8%0#-C.)-1.0-#+/#*.C)-+C#)(+#O)0-#-+#;%(,#A+0.0#)#)0#%0,-C8-+&I+.I/?3.

105、#)*C+)A3#3+(,#C.A+0%.#)0,#%0A.0-%T%.#A%CA()C#;.3)T%+C#;8#C.)(%0#=#AB.#)T%0#)0,#0+-#*0%3%0#A%CA()C#A3+%A.#T%)#A+1*(.:#)AA+0-%0012*#2/#?3.#)*C+)A3#3+(,#;.#A+0%-.0-#O%-39#)0,#)*(%A);(.#O%-3#.:%-%0#%0T.0-+C8#)*C+)A3.#C/+C#0.O(8#1)0/)A-C.,#*C+,A-a#)0,#C.A+17 Although each operator has their own operating

106、 model,product mix,and market characteristics,the four criteria reflect commonly shared priorities and so can be considered to represent a consolidated industry view.It should be noted that for operators,emissions savings are generally not the sole driver behind circularity initiatives.Complimentary

107、 environmental drivers include waste reduction,water use reduction and avoided resource extraction.While not the core focus of the paper,an example of how these other environmental benefits materialise for mobile handsets is provided in Annex A:Worked Examples and Typical Savings.7 For example,withi

108、n the built environment https:/ page 80 Box 1 Learnings from Other Industries In the interest of completeness,other industries were assessed to understand alternative accounting approaches.These include the built-environment,automotive,textiles,equipment rental and the consumer goods industry.Learni

109、ngs from these industries will be flagged in the following sections of the paper.It should be noted that the Telecommunications and ICT sectors were found to be relatively advanced in the sophistication of carbon accounting approaches for circularity,meaning learnings from other industries are limit

110、ed.Across industries,there is generally both a desire for an accounting approach that quantifies the carbon savings of circularity and an acknowledgement of the need for further development in this area7.18 5.Carbon Accounting Approaches Within the framework of the GHGP standards,two accounting appr

111、oaches are provided that can be applied to quantify the carbon savings of circularity.5.1 Scope 1,2 and 3 Inventory Accounting Inventory Accounting refers to the comprehensive measurement and reporting of all GHG emissions associated with an organisations operations over a defined period(typically a

112、 one-year reporting period).This is an attributional approach,whereby estimated emission actuals from organisational activities are attributed across Scopes 1,2 and 3.In the case of circular mobiles,CPE and active network equipment,the selling,leasing or deployment of these products is reported with

113、in the relevant Category of Scope 3,or within Scopes 1 and 2 for the energy consumed by equipment used in operations.5.2 Project-Based Accounting In contrast,Project-Based Accounting is designed to quantify the GHG reductions or avoidance resulting from a specific project or initiative.This approach

114、 can be used to compare a circular products emissions against a defined baseline(the Counterfactual Scenario),estimating the emissions impact that would have occurred in the absence of the circular product.It focuses on the net GHG benefit of the initiative and is often used to calculate the impact

115、of emission reduction projects,sometimes expressed in terms of“avoided emissions”.Figure 4 Carbon Accounting Approaches Adapted from Inventory and Project Accounting:A Comparative Review8.Inventory Accounting is based on attributed emissions within a defined period,while Project-Based Accounting dem

116、onstrates savings via a hypothetical scenario.Current GHGP standards permit both types of approaches,however,within the GHGP Scope 3 FAQ on this topic it was clarified that Project-Based Accounting calculations must be reported separately to inventory accounts9.The WRI guidance paper on Estimating a

117、nd Reporting the Comparative Emissions Impacts of Products indicates that Inventory Accounting should be the priority before Project-Based Accounting is used10.8 https:/ghgprotocol.org/blog/inventory-and-project-accounting#:text=These%20standards%20provide%20two%20methods,emissions%20effects%20of%20

118、a%20project 9 https:/ghgprotocol.org/sites/default/files/2022-12/Scope%203%20Detailed%20FAQ.pdf page 19 10 https:/ghgprotocol.org/sites/default/files/2023-03/18_WP_Comparative-Emissions_final.pdf page 12!#$%&!#$%()(%GH,H-.,!#A%CE)AEG%HC,-.%ALCEC0A1%C2C3.ACGC4-4A%CL41%AC,C%A,.%5L4A3CS%3.7GLCL839:LG;1

119、GA3CY=YCA,A7GC1)3A3CA;LLEL?.EGA%,17G.18CA7AE1%CA;LLEL9!#AB&()*+&IB-./&0A+B12P4A5)*+&IB-.!#$%&!#$%()(%GH,H-.,9BLL.;E-CEC-%#G4 19 6.Inventory Accounting:Scope 1,2 and 3 Impacts of Circularity To account for circularity using the Inventory Accounting approach,emissions are allocated in an attributional

120、 manner across the three Scopes and,in the case of Scope 3,across the relevant fifteen emissions Categories.This approach creates an emissions inventory,focusing on estimating and reporting actual emissions generated by organisational activities,that take place in a defined reporting period(typicall

121、y one year).It should be recognised that circular initiatives are not free from emission burdens and these should be reflected in the inventory.Even a light cosmetic refurbishment is likely to incur an emissions burden from additional processing and transportation with a 3rd party specialist.The Sco

122、pe 3 Categories used to capture this burden differ depending on the“ownership-deployment model”11.For accuracy,specific characteristics of refurbished products should be considered when developing the emissions inventory.For example,if a refurbished mobile handset that is sold to a customer has a sh

123、orter expected use cycle than a newly manufactured one,the Scope 3 Category 11(Use of Sold Products)emissions calculation should reflect the shorter usage footprint for the refurbished product.Emissions savings are generally realised through Inventory Accounting as a year-to-year result of an operat

124、ors product mix shifting away from newly manufactured products and towards refurbished ones.This is manifested indirectly,as due to the increased proportion of refurbished products distributed to customers or deployed in operations,or due to the reuse of active network equipment in the reporting yea

125、r,fewer newly manufactured product purchases are necessary.The majority of the savings are usually within Scope 3 Category 1,which,for the newly manufactured product,includes the cradle-to-gate emissions of the product.12 For the refurbished product,Category 1 includes the transportation to the 3rd

126、party for refurbishment and the reprocessing impact of the relevant activities carried out at the refurbishment facility(such as testing,reconditioning,and repackaging).It should be noted that in some cases,the use of refurbished or reused products may lead to increases in emissions in the inventory

127、.Please refer to section 10.Combined Approach:Carbon Savings of Circular Initiatives for a more detailed discussion on the savings of circular products within the emissions inventory.6.1 Key Considerations When Using Inventory Accounting To incorporate refurbished products into the inventory,it is n

128、ecessary to gather data and make calculations around the life cycle emissions of refurbished products.Depending on available data,operators may adopt different methodological approaches.Emission factors may be selected at product,supplier or industry-average levels,or a hybrid of these,and may use e

129、ither physical activity data or economic activity data(spend-based methods)(see Appendix B.3 11“Ownership-deployment model”is a new term created in the course of developing this paper in order to refer to the way in which products are sourced and deployed in an organisations own operations,or sold o

130、r leased to customers.12 For products sourced and deployed in own operations,such as active network equipment,Category 1 would typically include all distribution emissions as suppliers are typically responsible for product distribution to the operator.For Mobiles and CPE,Category 1 may not include t

131、he full transportation impact,some or all of which may be allocated to Category 4.20 Adjusting a Spend-Based Method in the Absence of Specific Emissions Factors).The below table illustrates these options for Category 1.As a general rule,the data selected should follow the GHGP principles of Relevanc

132、e,Completeness,Consistency,Transparency,and Accuracy13.Table 1 Emissions Data and Data Sources for Refurbished Products(Category 1)Method Emission Data Data Sources(Refurbished Products)Product-Level(Physical Activity Data)Product-level emissions factor for each product(kg CO2e/kg or kg CO2e/piece)P

133、roduct carbon footprints(PCFs)or Life Cycle Assessments(LCAs)for the refurbished product In the absence of specific refurbished product data,proxy factors can be developed based proportionally scaled footprints from newly manufactured products Supplier-Level(Physical Activity Data)Suppliers Scope 1,

134、2 and 3(Category 1 to 8)emissions data per quantities or units of product(kg CO2e/kg or kg CO2e/piece)Refurbishment partners per-unit(product)emission data,based on organisational emissions and units produced In the absence of specific refurbishment partner data,proxy factors can be developed based

135、proportionally scaled footprints from newly manufactured products Supplier-Level(Economic Activity Data)Suppliers Scope 1,2 and 3(Category 1 to 8)emissions data per unit of economic value(kg CO2e/$of revenue)Refurbishment partners per-unit($)emission data,based on organisational emissions and total

136、revenue In the absence of specific refurbishment partner data,proxy factors can be developed based proportionally scaled footprints from newly manufactured products Industry-Average(Physical Activity Data)Representative emissions factor for each type of purchased product(kg CO2e/kg or kg CO2e/piece)

137、Industry per-unit(product)emissions factor for the product category In the absence of specific industry repair or refurbishment factors,proxy factors can be developed based proportionally scaled footprints from newly manufactured products Industry-Average(Economic Activity Data)Environmentally exten

138、ded input output(EEIO)emissions factor for each type of purchased product per unit of economic value(kg CO2e/$)Industry per-unit($)emissions factor for the product category In the absence of specific industry repair or refurbishment factors,proxy factors can be developed based proportionally scaled

139、footprints from newly manufactured products.Adapted from Scope 3 Guidance for Telecommunication Operators14 This table uses Category 1 as the example for Data Sources for Refurbished Products.Category 1 typically realises the most significant emissions savings when the product mix shifts toward a hi

140、gher proportion of refurbished products.Based on a review of the literature and research papers,product-level methods(for example product carbon footprints“PCFs”or Global Warming Potential(GWP)impact measures from Life Cycle Assessments“LCAs”)and physical activity data are generally preferred to giv

141、e an accurate view of the emissions burdens from refurbishment initiatives.Product-level factors are generally preferred over industry or supplier-level factors as they account for specific product characteristics and avoid the averaging or apportionment effects of other methods.Specific factors are

142、 generally preferred over generic factors,as they more closely represent the actual emissions impacts.It is recognised that this may create situations where 13 https:/ghgprotocol.org/sites/default/files/standards/Corporate-Value-Chain-Accounting-Reporing-Standard_041613_2.pdf page 21 14 https:/ page

143、 23 21 inconsistent methods are used between newly manufactured products and refurbished products.For example,although product-specific LCA measures may be in use for newly manufactured products,there may be no LCA data available for refurbished equivalents.In this case,supplier-specific data from t

144、he specific refurbishment partner,apportioned to the specific product or operator,may be more accurate than data proportionally scaled from a new product LCA,or a proxy measure taken from industry averages of refurbished products.Physical activity data is generally preferred over economic activity d

145、ata as tying physical quantities to emissions factors avoids market variabilities/abnormalities.If specific data for the refurbished product is not available but is available for the newly manufactured version of the refurbished product,operators can approximate refurbished product emissions using p

146、roportional scaling.This is a“proxy data”approach as described in the GHGP:If data of sufficient quality are not available,companies may use proxy data to fill data gaps.Proxy data is data from a similar activity that is used as a stand-in for the given activity.Proxy data can be extrapolated,scaled

147、 up,or customised to be more representative of the given activity.15 Using this method,operators can take a percentage of the newly manufactured products production impact as an estimation of the reprocessing impacts in Category 1(these could be based on typical industry savings or based on savings

148、estimates from comparable products,for more information see the accompanying Excel Model).To complete the full picture of the value chain impacts of refurbished products across the lifecycle,transportation and use-phase emissions can be calculated to reflect the logistical characteristics and expect

149、ed duration of use of the refurbished product.In this way,proportional scaling can be incorporated to develop data proxies to fill data gaps when accounting for circular products.While a specific product-level method using physical activity data is preferred for refurbished products,there is recogni

150、tion that attaining widespread coverage of product-level factors is a journey.The Scope 3 Guidance for Telecommunication Operators prioritises methods that allow for hot spotting and emissions mitigation,acknowledging that data quality can be improved over time16.When a spend-based method is used,it

151、 should ideally be based on specific data from refurbishment and reverse logistics partners.Options to manage a spend-based method when specific factors are lacking are presented in Appendix B.3 15 https:/ghgprotocol.org/scope-3-calculation-guidance-2 page 18 16 https:/ page 11 22 Adjusting a Spend-

152、Based Method in the Absence of Specific Emissions Factors.Once the impacts of circular products are calculated,data should be incorporated into inventory accounts according to established accounting procedures specific to the relevant“ownership-deployment”model of the product.This process is demonst

153、rated in the following figure.The“ownership-deployment model”is a term created for use in this paper to represent how a product is sourced(purchased or leased from a supplier)and then deployed in operations or leased to customers or sold on by the business.The importance of the ownership-deployment

154、model is visualised in Figure 5,indicating how operators typically allocate emissions across different Scopes and Categories depending on the applicable ownership-deployment model.It should also be noted that the ownership-deployment model applied to a product can materially change the volume of emi

155、ssions reported within the annual inventory.Certain emissions categories may not apply under different ownership-deployment models,and temporal reporting requirements can vary with each model(see Appendix B.4 23 Ownership-Deployment Model and Inventory Accounting Results for more information).Figure

156、 5 Product Life Cycle Stages and Inventory Accounting The results of product life cycle assessments are allocated across Scope 1 and 2,and seven Scope 3 Categories depending on the ownership-deployment model.6.2 Practical Application of Inventory Accounting The following section summarises findings

157、regarding operator use of the Inventory Accounting approach for circular initiatives.It also provides some insight into how operators are handling the issue of embodied emission allocation between product lives,although this issue is explored in more detail within 9.Allocating Embodied Emissions Acr

158、oss Product Use Cycles.Please note that,as all operators studied were using the Operational Control approach,the below findings all relate to accounting within Operational Control boundaries.6.2.1 Mobile Refurbishment During interviews,both“leased product”and“sold product”ownership-deployment models

159、 were observed for mobiles,though selling devices is currently more prevalent.Inventory approaches and data sources can vary between operators,but Table 2 represents how sold mobiles are commonly accounted for within the emissions inventory.Table 2 Operator Inventory Accounting for Mobile Phone Refu

160、rbishment Mobile Phones!#A%CEF*%+*,%C-.LC!0AE,%*.F1EAO-ALCEF*%+*,%P.LC4%RAELS,+*E.TA-.%0EA+-+*E.U%+4%9.L:E;:*;C.+C?E0E.+%A-%LC+EC?S%+EARSA,B-%LC;EACCO.CC0A-+*E.%aLL*+*E.-=CRB-%C;EAC?*A,S=-ACRAELS,+%!#A%&DE)G+,-.+),EL+,0G%1O&G)!#A%&DE)G+,-.+),EL+,0G%1O&G)P,4R)S%GET,U%EL)R.%SESO.L,EL+,9O)S%OWASO.L!;,9

161、.)GS)!#A%&DE)G+,-.+),EL+,0G%1O&G)P,4R)S%GET,U%EL)R.%SESO.L,EL+,9O)S%OWASO.L!;,9.)GS)!#A%&DE)G+,-.+),EL+,0G%1O&G)0&.RG,!,EL+,?,AE)SG,-GLG%ESG+,OL,BRG%ESO.L),AE)SG,-GLG%ESG+,OL,BRG%ESO.L)9.L:E;:*;,AE)SG,-GLG%ESG+,OL,BRG%ESO.L),AE)SG,-GLG%ESG+,OL,BRG%ESO.L)-%LC;EACCO.CC0A-+*E.%CGR.%SOLa,BRSO.LEb,CGR.%S

162、OLa,BRSO.LEb0&.RG,!,EL+,?c,4R)S%GET,=GE)G+,)GS)CGR.%SOLa,BRSO.LEb,CGR.%SOLa,BRSO.LEb,c,4R)S%GET,=GE)G+,)GS)EE=LC+EC?S%+EA!#A%&DE)G+,-.+),EL+,0G%1O&G)P,4R)S%GET,U%EL)R.%SESO.L,EL+,9O)S%OWASO.L!,4)G,.d,0.b+,#%.+A&S)!#A%&DE)G+,-.+),EL+,0G%1O&G)P,4R)S%GET,U%EL)R.%SESO.L,EL+,9O)S%OWASO.L!,4)G,.d,0.b+,#%.

163、+A&S)!?,eL+f.df=OdG,U%GESTGLS,.d,0.b+,#%.+A&S)!?,eL+f.df=OdG,U%GESTGLS,.d,0.b+,#%.+A&S)CGR.%SOLa,BRSO.LEb,CGR.%SOLa,BRSO.LEb,!#$%&()*(+%(#,-#.,#L#01,)!#A%&DE)G+,-.+),EL+,0G%1O&G)!#A%&DE)G+,-.+),EL+,0G%1O&G)24 Scope 3 Category Newly Manufactured Refurbished 1.Purchased Goods and Services Product-leve

164、l method(specific):LCA,PER(product environmental report),EcoRating GWP data Product-level method(proxy):Proxy data/weighted averages used when specific data/LCAs not available Supplier specific allocated spend-based method.Hybrid approach may be applied in Category 1 data gaps for Mobiles suppliers

165、may be filled by industry-average factors Product-level method(proxy):Proportionally scaled percentage of newly manufactured product LCA based on ADEME study.Supplier specific allocated spend-based method(applied to emissions from refurbishment partner and,if separate,reverse logistics provider).Hyb

166、rid approach may be applied in Category 1 data gaps for Mobiles suppliers may be filled by industry-average factors Includes both reprocessing(manufacturing)emissions and reverse logistics emissions 4.Upstream Transportation and Distribution Product-level method(specific):LCA or proxy data relating

167、to the Distribution stage Physical activity data(weight x distance)based on transport assumptions Supplier specific allocated spend-based method covering forward logistics to customer Note upstream transport between supplier and distribution hub was allocated to either Cat 1 or 4.No international di

168、stribution accounted for due to local refurbishment Supplier specific allocated spend-based method to account for forward logistics to customer.May be reported within Category 1.5.Waste Generated in Operations Generally,mobiles are treated as“sold products”.May be used where operators retain ownersh

169、ip in Device as a Service(DaaS)scenarios.Same treatment as newly manufactured mobiles(left).9.Downstream Transportation and Distribution Category 9 was occasionally used by operators instead of Category 4,with the same principles as Category 4 applied.Same treatment as newly manufactured mobiles(lef

170、t).11.Use of Sold Products Use-phase CO2e for full expected lifetime based LCA use phase footprint Physical activity data(typical kWh usage from device report/proxy)multiplied by an expected lifetime applied to country of sales grid factor(lifetime is typically a standardised corporate assumption of

171、 product life,often 3 years).Same methods as newly manufactured product are typically applied The same use phase impact as newly manufactured device may be assumed,or a proportionally scaled usage based on shorter lifetime,per proxy from ADEME report,typically a 2-year lifetime used in lieu of 3 yea

172、rs.12.End-of-Life Treatment of Sold Products LCA EoLT impacts may be used.Physical activity data(weight and operator specific assumptions)may be used.Sometimes excluded based on low significance/materiality.EoLT for replacement components typically excluded as deemed not material,but may be captured

173、 within Category 1 when operators apply the supplier specific spend method.Retained components of newly manufactured mobiles are generally excluded from the refurbished footprint,per allocation procedure Cut off B(see 9.Allocating Embodied Emissions Across Product Use Cycles).13.Downstream Leased As

174、sets Generally,mobiles are treated as“sold products”,however category 13 may be used where operators retain ownership in DaaS scenarios.Same treatment as newly manufactured mobiles(left).6.2.2 CPE Refurbishment While both“leased product”and“sold product”ownership-deployment models are used within th

175、e industry for CPE,in most cases CPE is leased to customers.It is worth noting that,in some cases,CPE follows a leasing-type business model but operators opt to account for emissions under sold product Categories within the Scope 3 inventory,for simplicity of reporting.Table 3 represents typical inv

176、entory categorisation methods used by operators to account for CPE within the emissions inventory.25 Table 3 Operator Inventory Accounting for CPE Refurbishment Customer Premises Equipment Scope 3 Category Newly Manufactured Refurbished 1.Purchased Goods and Services Product-level method(specific):L

177、CA/PCF GWP data received from CPE suppliers Supplier specific allocated spend-based method.Hybrid approach may be applied in Category 1 so data gaps for CPE suppliers may be filled by industry-average factors Supplier specific allocated spend-based method(applied to emissions from refurbishment part

178、ner and,if separate,reverse logistics provider).Hybrid approach may be applied in Category 1 so data gaps for CPE suppliers may be filled by industry-average factors Includes both reprocessing(manufacturing)emissions and reverse logistics emissions 4.Upstream Transportation and Distribution Product-

179、level method(specific):LCA/PCF Distribution data received from CPE suppliers Physical activity data(weight x distance)based on transport assumptions Supplier specific allocated spend-based method covering forward logistics to customer.Note upstream transport between supplier and distribution hub all

180、ocated to either Cat 1 or 4.No international distribution accounted for due to local refurbishment Supplier specific allocated spend-based method to account for forward logistics to customer.May be reported within Category 1 as part of aggregated forward logistics spend 5.Waste Generated in Operatio

181、ns Physical activity data(weight and operator specific assumptions).Sometimes excluded due to insignificance Same treatment as newly manufactured CPE(left)9.Downstream Transportation and Distribution Category 9 was occasionally used by operators instead of Category 4,with the same principles as Cate

182、gory 4 applied.Same treatment as newly manufactured CPE(left)11.Use of Sold Products Physical activity data(typical kWh usage from device report/proxy)multiplied by an expected lifetime applied to country of sales grid factor(lifetime is typically a standardised corporate assumption of product life,

183、often 5 years).Excluded as it is generally considered to have been accounted for when the virgin product was sold.As refurbishment is built into the CPE operating model,the initial sale has already accounted for all use cycles of the sold product over the overall expected lifetime.12.End-of-Life Tre

184、atment of Sold Products LCA.Physical activity data(weight and operator specific assumptions).Sometimes deemed not material.May be reported within Category 1.EoLT for replacement components typically excluded as deemed not material but may be captured within Cat.1 when applying the supplier specific

185、spend method.Retained components of newly manufactured CPE are generally excluded from the refurbished footprint,per allocation procedure Cut off B(see 9.Allocating Embodied Emissions Across Product Use Cycles).13.Downstream Leased Assets Physical activity data for use-phase CO2e reported for 1 year

186、 based on annual snapshot of typical kWh usage from unit report/proxy)multiplied by country average grid factor(s).Sometimes leased product usage is reported upfront in full in Cat.11 based on expected life.Same treatment as newly manufactured CPE(left)Purple text=Products leased to customers.Blue t

187、ext=Products sold to customers 6.2.3 Active Network Equipment Refurbishment Active network equipment can be purchased by operators(this approach is more common)or leased from vendors for use in network operations.Currently,purchases of network equipment are predominantly newly manufactured goods but

188、,in some instances,refurbished equipment is 26 purchased.Some operators also reuse decommissioned equipment from one part of their business elsewhere within the network(sometimes in a different operating country),and on some occasions may sell decommissioned equipment to a third party vendor or mark

189、etplace,or directly to another operator.Table 4 represents typical Inventory Accounting approaches used for the purchasing and leasing of active network equipment.Table 4 Operator Inventory Accounting for Active Network Equipment Refurbishment Active Network Equipment Emissions Category Newly Manufa

190、ctured Refurbished Scope 3 1.Purchased Goods and Services Supplier specific allocated spend-based method.Hybrid approach may be applied in Category 1 so data gaps for Equipment suppliers may be filled by industry-average factors.Includes both manufacturing emissions and distribution(supplier to telc

191、o transport)emissions This category is optional for leased equipment and is not always reported.17 Supplier specific allocated spend-based method(applied to emissions from refurbishment partner and,if separate,reverse logistics provider).Hybrid approach may be applied in Category 1 so data gaps for

192、Equipment suppliers may be filled by industry-average factors.Includes both reprocessing(manufacturing)emissions,reverse logistics,and forward distribution(supplier to telco transport)emissions Scope 3 4.Upstream Transport and Distribution Generally,all product transport is reported within Category

193、1 Same treatment as newly manufactured equipment(left)Scope 3 5.Waste Generated in Operations Physical activity data(weight and operator specific assumptions).Reporting product EoLT emissions for leased equipment is optional and is not always reported,but may be reported under Category 8 Same treatm

194、ent as newly manufactured equipment(left)Scope 3 8.Upstream Leased Assets Physical activity data(use-phase CO2e reported for 1 year based on annual snapshot)Note:If the operator is considered to have“operational control”of the asset,usage emissions are reported within Scope 1 and 2 Same treatment as

195、 newly manufactured equipment(left)Scope 1 Stationary Combustion Accounted in Scope 1 and 2 inventories,as part of annual electricity usage(kWh)or fuel burnt in generators.Same treatment as newly manufactured equipment(left)Scope 2 Purchased Electricity Red text=Products leased for use in own operat

196、ions.Green text=Products purchased for use in own operations 17 The optionality of reporting of Scope 3 Category 1 and 5 for leased equipment was noted in the Scope 3 Guidance for Telecommunication Operators https:/ p47 Box 2 Resale of Active Network Equipment 27 6.2.4 Device Repair Services As outl

197、ined in 3.Defining Circularity in the Context of Carbon Accounting,in the case of Device Repair Services,the customer brings their device to the operator who will have it repaired,often via a 3rd party repair partner,before it is returned to the customer.In this instance,ownership generally does not

198、 pass from the customer to the operator,and consequently,there is no“sold product”impact within the emissions inventory,nor is a“leased product”relationship established.The direct impacts for Inventory Accounting,in this case,are therefore limited to the operators spend with a 3rd party repair partn

199、er,which is accounted for through regular accounting procedures under Scope 3 Category 1,typically covering any transportation and reprocessing emissions burdens associated with the repair.From an operators perspective,this case was generally not seen as significant enough to warrant detailed Invent

200、ory Accounting(for example based on a product-level method),due to its low impact within the overall inventory.Instead,it is typically accounted for using supplier-level or industry-average spend-based methods.However,as the repair of a device may be considered to extend the lifetime of the device i

201、n use by the customer and therefore delay the purchase of a newly manufactured device,there is a theoretical societal benefit from repair in terms of“avoided”emissions.An“avoided emissions”calculation via the Project-Based Accounting approach has greater applicability to this case and will be furthe

202、r explored in section 7.2.2 Device Repair Services.In the case of repairs performed as a service outside of warranty,the societal emissions avoided by reducing the production of new devices are not directly reflected in an operators emissions inventory.However,repairs performed within warranty may h

203、ave a second order impact on the operators emissions inventory by reducing the need for replacement devices.Providing a replacement typically requires the operator to procure an additional new or refurbished device to replace the non-functional device,and this carries an associated inventory impact.

204、When replacements involve newly manufactured devices,the emissions savings from successful repairs can therefore be substantial versus replacement with a new device.On the other hand,if warranty replacements are fulfilled using refurbished devices,the carbon savings are likely negligible,as the emis

205、sions associated with repair and refurbishment are generally comparable.Reselling active network equipment could,in theory,incur a“Use of Sold Products”(Category 11)burden from the second user.This could be the case even if the equipment is first sold on to a 3rd party refurbishment partner.However,

206、there are provisions within the literature that may exclude this activity from Scope 3 reporting(see Appendix 5).In interviews,no instances of Scope 3 Category 11 reporting were observed for resold active network equipment.Overall,operators viewed this type of accounting as counterproductive as it c

207、ould disincentivise circular operator behaviours.28 7.Project-Based Accounting:Avoided Emissions of Circularity Alongside the Inventory Accounting approach,a second,complementary approach is outlined in the literature that is highly relevant when quantifying the carbon impacts of circularity.This is

208、 Project-Based Accounting,also known as consequential accounting or intervention accounting.Under this approach,refurbished or repaired products can be considered to partially or fully substitute newly manufactured ones,enabling the calculation of emissions reductions,so-called“avoided emissions”.Th

209、e avoided emissions figure is based on a comparison between two scenarios:a Counterfactual Scenario(which consists of the products most likely selected if the circular option were unavailable18)and a Circular Scenario(which consists of refurbished or repaired products).Figure 6 Project-Based Account

210、ing As displayed in this graphic,the premise of this accounting approach is the principle that,to some extent,circular products are substituting newly manufactured,counterfactual products.The Project-Based Accounting approach generally has two use cases within the industry:1.External Claims:For cust

211、omer facing sustainability claims that report on the“avoided emissions”impact of historical initiatives.2.Internal Appraisals:For internal“carbon business cases”calculating the actual or potential benefits of emissions reduction initiatives.As previously stated,any reporting using this approach must

212、 be disclosed separately from Inventory Accounting.19 This is because the two are using different and non-comparable approaches.20 The Inventory Accounting approach reflects attributed emissions actuals,while Project-Based Accounting is a consequential approach,using hypothetical scenarios.Due to a

213、reliance on these hypothetical displacement scenarios,the GHGP has received feedback that Project-Based Accounting is not as robust as Inventory Accounting.21 However,when used for internal assessments,it may be beneficial to link the Project-Based calculations back to the emissions inventory.This c

214、onnection can be used to model the potential impact of the circular initiative on future inventory numbers,which are often connected to science-based reduction 18 Climate-Avoided-Emissions-guidance_WBCSD.pdf page 48 19 https:/ghgprotocol.org/sites/default/files/2022-12/Scope%203%20Detailed%20FAQ.pdf

215、 page 19 20 https:/ghgprotocol.org/sites/default/files/2023-03/18_WP_Comparative-Emissions_final.pdf page 7 21 https:/ghgprotocol.org/sites/default/files/2024-03/Scope-3-Survey-Summary-Draft.pdf page 68!#A%CE)*%#)+,-*CA).!#$%CE)*+E,-*.LCM.NL*,-C2P4RR4N)RM.NL*,-4N)C6CT.E)RUN.-E-4N)C6C9RC6C2N:T!.*#+),

216、-*CA).;4.,*$E.CM.NL*,-C2P4RR4N)RU.N,RR4)=C6CT.E)RUN.-E-4N)C6C9RC6CU$E,P)-C;NPUN)-C2N:T/0.1C1,23.44.A4!#$%&E)&*&+,*&-.L-0E-29 targets and organisational climate transition plans.This is covered in more depth in 10.Combined Approach:Carbon Savings of Circular Initiatives.7.1 Key Considerations When Us

217、ing Project-Based Accounting Carbon savings within Project-Based Accounting largely depend on the Counterfactual Scenario selected and the extent to which the circular product is assumed to be a substitute for the newly manufactured product used in the counterfactual scenario.7.1.1 Selecting a Count

218、erfactual Product The counterfactual product should be chosen carefully to develop considered avoided emissions estimations.In some cases,the counterfactual may be the same as the virgin unit baseline,which represents a newly manufactured version of the same model as the refurbished product.In other

219、 cases,if a newer model would logically have been selected in the absence of the refurbished option,the counterfactual product selected may be a different model from the refurbished comparator.The following table clarifies this terminology with product examples.Table 5 Product Terminology and Projec

220、t-Based Accounting Terminology Definition Mobile Phone CPE Active Network Equipment Virgin Unit Baseline A newly manufactured version of the circular product(same model).Newly manufactured iPhone 14 128GB Newly manufactured Wi-Fi 6 router Newly manufactured v1 server Circular Product A refurbished o

221、r repaired version of the virgin unit baseline(same model).Refurbished iPhone 14 128GB Refurbished Wi-Fi 6 router Refurbished v1 server Counterfactual Product The product most likely selected in the absence of the circular product.Newly manufactured iPhone 15 256GB Newly manufactured Wi-Fi 7 router

222、Newly manufactured v2 server The ISO 14064-3 principle of“Conservativeness”should be considered when selecting counterfactual products.The standard defines this principle as using a selection that is“cautiously moderate”when assessing comparable alternatives22.Here,choosing a conservative counterfac

223、tual product will depend on the ownership-deployment model,which life cycle stage is dominant for the product,and the availability of lower-emission,more advanced alternative products.For example:Comparing the footprint of a refurbished iPhone 14 128GB to the latest iPhone 16 Plus 512GB might overst

224、ate benefits,as it assumes a customer would have otherwise selected a newer,more powerful,model with a relatively high embodied footprint,versus a more adjacent model such as an iPhone 15,or simply a new version of the same iPhone 14.On the other hand,for active network equipment,comparing a refurbi

225、shed model to its virgin unit baseline might be misleading if the counterfactual product is not a newer,more capable model.This is because with,the pace of technological innovation,older models are 22 ISO 14064-3(2019-04)Part 3:Specification with guidance for the verification and validation of green

226、house gas statements page 8 30 quickly replaced by newer models with better energy efficiency.Assuming an operator would have purchased an older model rather than a newer one in the absence of the refurbished product may thus understate the negative usage phase impacts of the refurbished product.7.1

227、.2 Deciding on a Substitution Rate Once an appropriate counterfactual product has been selected,the concept of substitution becomes particularly important.The“substitution rate”is defined in research papers as the extent to which the purchase of a used item replaces the purchase of a newly manufactu

228、red item23.To support a claim for fully avoided emissions,a circular product must be assumed to be a 1-to-1 substitute of the comparator product.This is deemed a“perfect substitution”,and means the circular product has the same expected duration of use and provides the equivalent function of the cou

229、nterfactual.When a product does not provide full equivalency,it is deemed an“imperfect substitute”.In the case of an imperfect substitution,and to adopt a conservative approach,the number of refurbished product units required may be scaled so the comparison is equivalent.In practice,this is typicall

230、y based on the duration of use differential between the counterfactual and circular product.For example,if a newly manufactured mobile handset is expected to last 3 years,but the circular one lasts 2 years,the circular product only replaces two-thirds of the counterfactual product due to its duratio

231、n of use.In this case,the emissions impact of 1.5 circular products should be used to make an equivalent comparison with 1 counterfactual product.Depending on the goal and purpose of the calculation,a different approach may be taken,and the principle of conservativeness is viewed differently.For exa

232、mple,if the intention is to create an internal business case for the impacts of savings on the inventory,it is more practical to align the calculation approach with that used in Inventory Accounting.In this case,the substitution rate may not be applied for a sold product(see 10.Combined Approach:Car

233、bon Savings of Circular Initiatives for more information).If the calculation is used for external claims,such as“Avoided emissions”claims,taking a conservative and justifiable approach to the quantum of the claim normally takes precedence over aligning with Inventory Accounting procedures.7.2 Practi

234、cal Application of Project-Based Accounting The following section outlines findings relating to operator approaches to Project-Based Accounting for circular initiatives.7.2.1 Product Refurbishment Project-Based Accounting was found to be relatively popular with operators researched.Around one-third

235、of assessed operators were found to be making some type of“avoided”or“saved”emissions claim relating to their refurbishment activities.A list of example claims is available in Appendix B.6 23 Calculating the Environmental Benefit of Reuse Platforms 31 Within-industry Project-Based Accounting.Avoided

236、 emission claims are made across product categories,but the exact methodology underpinning the claims is rarely publicly disclosed.7.2.2 Device Repair Services Currently,there is limited evidence of avoided emissions claims being made across the industry for Device Repair Services,although a handful

237、 of instances were observed for mobiles:“Finding and utilising good repair services and infrastructure that makes repairs simpler can be more appealing than replacements and can also make a big impact on your companys net zero Box 3 Avoided Emissions and CPE In the context of refurbishment,an“avoide

238、d emissions claim”is based on the idea that a newly manufactured,counterfactual product(to some extent)has been substituted and displaced,creating a societal benefit.This is a relatively simple assertion for sold products,such as mobiles,as within the business model of the product category it is gen

239、erally reasonable to assume that in the absence of a refurbished alternative,the operator would have sold a newly manufactured product.With leased CPE business models,however,the basis of a claim can become more complex,as it could be argued that an aspect of circularity(light refurbishment)is embed

240、ded into the core CPE business model and has become an“industry norm”.Depending on the purpose of the avoided emissions claim,and the level of assurance being applied,operators may want to consider the conservativeness of their CPE claims,as,while ISO 14064-2 has relatively simple additionality requ

241、irements,others such as the VCS assurance standard may apply a stricter requirement called the“common practice test”to assess whether the activity is standard across the industry.In this CPE scenario,the assurance test may conclude that purchasing newly manufactured CPE is not a valid Counterfactual

242、 Scenario for comparing with the collection and refurbishment of CPE that was designed and deployed with the intention of continuous use and reuse.Discussions with operators reveal an alignment that avoided emissions claims are generally more robust for CPE if:1.CPE is sold(rather than leased)to cus

243、tomers,and ownership is recovered through an operator initiative before it is refurbished and redistributed.2.Leased CPE,after its 5-year life,undergoes more intensive remanufacturing for an additional use cycle,which may involve upgraded technical specifications.3.Rates of recovery of leased CPE ar

244、e increased,and this results in the avoidance of newly manufactured product purchases.For example,collection rates of routers are increased from 80%to 90%versus last year.Regardless of the type of claim made,the standards require transparent disclosure and justification of the Counterfactual Scenari

245、o used,alongside the claim.32 journey.By adding one year to the life of a smartphone,we could save the same volume of carbon emissions by 2030 as taking 4.7 million cars off the road”24 As outlined in section 6.2.4 Device Repair Services,repairing a customer device could in theory postpone the purch

246、ase of a newly manufactured one,resulting in reduced demand for the production of newly manufactured devices,and therefore lower societal emissions.On a global level,therefore,avoided emissions from repair can generally be considered a positive societal impact,as they help to delay or avoid the emis

247、sions associated with newly manufactured devices.Savings estimates from this case are explored further in Annex A.3 CPE Refurbishment.However,while avoided emissions from device repairs are generally regarded as positive impacts on a societal-level,operators should be cautious of directly attributin

248、g these savings to their own operations.When repairs are performed as a service,outside a warranty structure,the uncertainty surrounding whether a customer would have purchased a replacement device directly from the same operator makes it more appropriate to associate such emissions“savings”with bro

249、ader society-level impacts.For instance,linking an increase in device repairs to a projected reduction in Scope 3 Category 1 emissionsstemming from fewer newly manufactured mobiles being soldlikely represents a tenuous and speculative connection.As discussed in 6.2.4 Device Repair Services,in the ca

250、se of warranty repairs,savings could reasonably be tied back to the operator.7.2.3 Other Industries and Project-Based Accounting The popularity of Project-Based Accounting and avoided emissions claims is mirrored across non-ICT industries.These types of claims were found to be the primary way(accord

251、ing to publicly available information)companies in other industries are demonstrating the carbon benefits of circularity initiatives.Claims are commonplace and,in some cases,accompanying avoided-emissions targets have been instituted(for example BMW have announced a target of avoiding over 200 milli

252、on tonnes of CO2 emissions by 203025).24 https:/www.vodafone.co.uk/business/insights-articles/circular-economy-acceleration-to-net-zero 25 https:/ 8.Setting Boundaries When Calculating Savings 8.1 Standards and Guidance on Boundary Setting For both the Inventory and the Project-Based Accounting appr

253、oaches,consistent boundaries are required to account for circular and newly manufactured products in a uniform manner.This section will explore the importance of boundary selection when quantifying the carbon savings of circularity.At the product unit-level,the system boundary,as defined by ISO 1404

254、4,determines which processes are included in the product system26.This is important when assessing circular versus counterfactual products.Critically,the comparison should be made on an equal basis;if a life cycle stage is included in one scenario,the equivalent activities(or“unit processes”)should

255、be included in the other,provided they are assessed as significant27.The ITU-T L.1410 standard discourages excluding(or“cutting off”)life cycle stages or unit processes where this can be avoided.If a unit process is excluded,due to,for example,the environmental impacts being deemed insignificant,the

256、 criteria must be explicitly stated and consistently applied within the life cycle assessment study28.8.2 Setting Boundaries within Circular Scenarios In the case of Product Refurbishment and Device Repair Services,the EoLT of replacement components installed in refurbished products could be conside

257、red for exclusion based on insignificance.Since only a small fraction of components are typically replaced during refurbishment or repair,and considering the relatively low significance of the EoLT stage emissions for replacement components compared to the rest of the circular product life cycle sta

258、ges,emissions from this process are minimal and tend not to meet materiality thresholds,so can generally be excluded.Taking into account that the EoLT process impact can be excluded for the second use cycle of a typical circular product,the following graphic provides an example of a cradle-to-grave

259、system boundary at the unit-level.This displays the life cycle stages that would typically be considered for newly manufactured and circular products,ensuring that boundaries are consistently applied across both scenarios:26 ISO 14044(2006-07-01)Environmental management Life cycle assessment Require

260、ments and guidelines page 5 27 Insignificance can be determined by“Estimating the processs emissions using data with upper limit assumptions to determine whether,in the most conservative case,the process is insignificant based on either mass,energy,or volume,as well as GHG relevance criteria.To dete

261、rmine whether an estimate is insignificant or not,a company needs to establish a definition of insignificance which may include a rule of thumb threshold.For example,a rule of thumb for insignificance may be material or energy flows that contribute less than one percent of the mass,energy,or volume

262、and estimated GHG significance over a process,life cycle stage,or total inventory.”https:/ghgprotocol.org/sites/default/files/standards/Product-Life-Cycle-Accounting-Reporting-Standard_041613.pdf page 42 28“By invoking a cut-off,the assessment can be simplified by excluding processes that will not s

263、ignificantly change the overall conclusions of the study,as long as the intended application is metCut-offs shall be avoided as far as possible”ITU-T L.1410(12/2014)Methodology for environmental life cycle assessments of information and communication technology goods,networks and services page 33 34

264、 Figure 7 System Boundaries at a Unit Level The LCA stage notations in this graphic are based on ITU-T L.141029.This graphic illustrates a system boundary covering cradle-to-grave processes for counterfactual(newly manufactured)and circular products.In general,if an LCA stage is included within the

265、system boundary,the processes for both products in the comparative assessment should be included.The exception is if a process does not meet a materiality threshold.When setting boundaries for emissions calculations,the next key consideration is how embodied emissions should be allocated across mult

266、iple use cycles.This is an issue of allocation,which will be explored in greater detail in the following section.29 ITU-T L.1410(12/2014)Methodology for environmental life cycle assessments of information and communication technology goods,networks and services page 105,119!#ABCDE#EFDAG+,-.E#LMB-,N2

267、G+,-.E#LM-P4G+,-.E#LM-+G+,-.E#LM-R!#A%&E)*A+,-.)L)&)M1A12AAPEM2.,&)M14E1LRME&A12A4E6*TLPEM2.,&AUM94SDTU9EFDA+DUAEM:#9EU#;-SDTU9E;?-#AU:#9EUMTA+F9U;#-SDTU9E4BE-BBMCATaD:aGF:MEMCD9MBBFALEMcMBM-#AT-dD#T-GDLFBEF9BeAT-BBMCATaD:aGF:MEMC;#9MfMAE-+DfCDAMAEBA!#$%&$&()*+&+$+*&$,-$,#./()#$/M1/2M/3/(M,$/4.(,5$+

268、&.&M+/M2$-M$,6&$,67&16-)+1$.)/&+8$35 9.Allocating Embodied Emissions Across Product Use Cycles In the context of emission accounting for circularity,the question of allocation is if,how,and to what extent,embodied emission impacts should be shared between product use cycles.Emissions allocation is a

269、n important question for circular product accounting,as it dictates how product emissions flow into inventory accounts,and can also alter the proportion of emissions attributed to the circular scenario,which changes the overall savings result.The Scope 3 Guidance for Telecommunication Operators prov

270、ides some clarification on the issue of allocation in the context of reused,refurbished or repaired goods.This guidance states that:“The emissions from purchased goods previously used should not include the emissions that arose from their extraction from raw materials,production and transportation a

271、ssociated with their original manufacture.Emissions that arise from any further extraction,production and transportation associated with such goods shall be accounted for by the telecommunication operator for the reporting year in which they purchased or acquired them.”30 This is a logical and pragm

272、atic allocation approach,though some feedback received from survey respondents during the GHGP update process has included calls to explore sharing embodied emissions across use cycles,enabling more balanced and impartial accounting,and so this is an area where GHGP standards may change in future.31

273、 Embodied emissions allocation in the context of circularity remains an evolving area;much of the current literature on allocation focuses on recycling and co-products32.There are,however,principles within the standards and guidance that inform the discussion of allocation within the context of this

274、 paper.9.1 Potential Allocation Approaches From the literature and research papers,four potential allocation approaches are identified for circular practices.These share embodied emissions across product lives in the following ways(note for the purposes of the following figures,the EoLT of replaceme

275、nt components is excluded,as discussed in 8.Setting Boundaries When Calculating Savings).30 https:/ page 15 31 https:/ghgprotocol.org/sites/default/files/2024-03/Scope-3-Survey-Summary-Draft.pdf page 60 32 ITU-T L.1410(12/2014)Methodology for environmental life cycle assessments of information and c

276、ommunication technology goods,networks and services page 42,43 36 Table 6 Comparison of Potential Allocation Approaches Life Cycle Phase Approach Production Transportation 1st Use Reverse Logistics Reprocessing Forward Logistics 2nd Use Ultimate EoLT Cut-off Variant A Embodied emissions are not shar

277、ed between use cycles,and the second use cycle takes responsibility for the full EoLT.Adapted from ITU-T L.141033 Cut-off Variant B Embodied emissions are not shared between use cycles,and the first use cycle takes responsibility for the full EoLT.Adapted from ADEME34 Split Emission All embodied emi

278、ssions are shared equally between use cycles.Adapted from the Waste and Resources Action Programme(WRAP)35 Depreciation Embodied emissions are depreciated across product use cycles.Adapted from the International Journal of Lifecycle Assessment36 =Allocation to Use Cycle 1.=Allocation to Use Cycle 2.

279、Note:EoLT=end-of-life treatment.Source:Visual concept based on Fraunhofer IZM(2022)37.9.2 Assessment of Allocation Approaches The assessment criteria of Simplicity,Pragmatism,Alignment and Incentives(outlined in 4.Industry Challenges in Carbon Accounting for Circularity)were applied to the potential

280、 approaches.Each of the potential allocation approaches has unique advantages and drawbacks,for a full assessment of the four allocation approaches,please refer to Appendix B.7 33 ITU-T L.1410(12/2014)Methodology for environmental life cycle assessments of information and communication technology go

281、ods,networks and services page 43 34 https:/librairie.ademe.fr/dechets-economie-circulaire/5833-assessment-of-the-environmental-impact-of-a-set-of-refurbished-products.html page 20 35 https:/www.wrap.ngo/sites/default/files/2020-09/WRAP-Final-Reuse-Method.pdf page 12 36 The search for an appropriate

282、 end-of-life formula for the purpose of the European Commission Environmental Footprint initiative.37 https:/www.izm.fraunhofer.de/content/dam/izm/de/documents/Abteilungen/Environmental_Reliability_Engineering/Projekte/Carbon%20savings%20reuse%20of%20ICT%20equipment%20November_2022.pdf page 15 37 As

283、sessment of Allocation Approaches.The testing process yielded the following results:Table 7 Operator Preferences for Allocation Approach Approach Simplicity Pragmatism Alignment Incentives Cut-off Variant A Cut-off Variant B Split Emission Depreciation =Excellent.=Good.=Fair.=Poor.While Split Emissi

284、ons and Depreciation approaches scored highly in terms of accurately reflecting emissions savings,they did not meet operator requirements of Simplicity and Pragmatism.Allocation approaches that involved splitting embodied emissions across use cycles(Split Emissions and Depreciation approaches)were s

285、een as problematic from Simplicity and Pragmatism perspectives.Current inventory methodologies do not easily allow for this type of allocation as they can require complex assumptions or retroactive accounting practices.Cut-off“Variant B”(whereby the EoLT is assigned to the first use cycle)was assess

286、ed as the preferred allocation procedure.This approach is in line with current GHGP literature and scores well across all criteria,particularly in its ability to enable simple and pragmatic accounting procedures.It was deemed superior to Variant A as the EoLT phase treatment was considered more easi

287、ly applicable for inventory accounting for sold products.Adoption of Cut-off“Variant B”,has two major implications:Within Inventory Accounting,if an operator is selling a refurbished product under this approach,they would generally only account for the additional reprocessing and transportation burd

288、en of refurbishment,plus the additional use-phase.EoLT impacts would be excluded(the EoLT of the newly manufactured product is allocated 100%to the newly manufactured product,while the EoLT of the replacement components is generally considered insignificant).Within Project-Based Accounting,the Circu

289、lar Scenario would consist only of the additional reprocessing and transportation burden,and the additional use-phase,meaning calculations made for internal use are likely to broadly translate to inventory reductions.It should also be noted that the preference for this type of cut-off approach to al

290、location is currently mirrored across industries.It is frequently viewed as the most pragmatic approach to sharing emissions across product use cycles.Within the built environment,standards EN 15978(2011)and EN 15804(2012)use a type of cut-off approach where the impacts from virgin material 38 produ

291、ction and EoLT are attributed to the first use.38 In ICT,HPE reference a cut-off type approach when estimating emissions from circular practices within their circular economy report.39 10.Combined Approach:Carbon Savings of Circular Initiatives For operators seeking to understand how increases in ad

292、option of refurbished products may impact their organisational emissions footprint,a combination of the Inventory Accounting and Project-Based Accounting approaches can be used to calculate associated inventory reductions.This method can be used for internal“carbon business cases”to appraise the pot

293、ential sustainability benefits of a proposed refurbishment initiative,to identify what savings can be made to contribute towards science-based emissions reduction targets or to support climate transition planning.To perform this analysis,operators would begin with a Project-Based approach to quantif

294、y the expected inventory impacts of a refurbished product versus a counterfactual newly manufactured product.Operators can then scale these up to reflect full scale Circular vs Counterfactual scenario,before categorising the two in line with Inventory Accounting procedures,to show the hypothetical s

295、avings impacts on the Scope 1,2 and 3 inventory.A step-by-step description of the calculation method is outlined below.10.1 Calculating Inventory Reductions from Circular Initiatives Operators should apply four key steps when calculating the carbon savings of circular initiatives:A.Defining the Proj

296、ect Boundary The boundary should encompass all activities associated with the refurbishment initiative,including:Collection,transportation,and reprocessing of used products(Circular Scenario).Avoided production,transportation and end-of-life treatment of new products(Counterfactual Scenario)The use

297、phase impacts of each scenario.These may be different depending on the relative energy efficiency of the products selected and the substitution rates applied,based on the expected duration of use.B.Quantifying Circular Scenario Emissions 38 Development of a life cycle assessment allocation approach

298、for circular economy in the built environment page 3 39 https:/ page 11 39 In this step,operators calculate the emissions impacts from the circular initiative,including the emissions from the refurbishment operation and the use of the refurbished product during their second use cycle.Data requiremen

299、ts are typically:Emissions factors for refurbished products,including:o GHG impacts of refurbishment processes(e.g.,cleaning,repairs,testing).o Transport of goods to and from refurbishment facilities.o Packaging and redistribution to customers.Expected duration of use of the circular product(e.g.2 y

300、ears for a refurbished mobile).Typical energy consumption of the refurbished product per year(in kWh).Average in-use energy emissions factor(kg CO2e/kWh).Depending on available data,emissions factors may use different methods:Product-level method:such as the GWP impacts from the relevant lifecycle s

301、tages taken from an LCA or PCF of the specific refurbished product.Supplier-level allocation method:such as the Scope 1,2 and upstream Scope 3 emissions of the refurbishment provider allocated to the in-scope product via physical or economic activity data.Data for transportation partners may also ne

302、ed to be added if transportation is not handled by the refurbishment provider.Industry-average method:such as an industry average factor for electronics repair and refurbishment.For the purposes of this calculation,practitioners should mirror the data sources used in the emissions inventory.For exam

303、ple,if emissions relating to reprocessing appear as spend-based supplier-level emissions in Category 1,operators should use this data in order to give a faithful representation of inventory savings as they appear in the inventory.C.Quantifying Counterfactual Scenario Emissions The Counterfactual Sce

304、nario represents what emissions would have occurred without the refurbishment initiative(e.g.purchasing and selling newly manufactured mobiles).Data requirements are typically:Emissions factors for the full lifecycle of a newly manufactured product,including:o Production(including raw material extra

305、ction)o Transportation o Use o End-of-life treatment.Expected lifetime of the counterfactual product(e.g.3 years for a newly manufactured mobile)Typical energy consumption of the refurbished product per year(in kWh)Average in-use energy emissions factor(kg CO2e/kWh).40 For the purposes of this calcu

306、lation,practitioners should mirror the data sources as they would have been used in the emissions inventory.For example,if emissions relating to production appear as product-level PCF-based emissions in Category 1,operators should use this data in order to provide a faithful representation of how co

307、unterfactual impacts would have appeared in the inventory.D.Simulating Inventory Savings Once project-level scenarios are defined,relative savings can be quantified within the context of the companys overall GHG inventory.Generally,savings follow the below principle:Inventory Savings=Counterfactual

308、Scenario Emissions(based on inventory methods)Circular Scenario Emissions(based on inventory methods)However,when comparing inventory impacts of circular versus counterfactual products,overall volumes must be considered.This raises the concept of substitution within the context of inventory accounti

309、ng.When simulating inventory savings,substitution rates may be factored in differently depending on the ownership-deployment model of the product in question,and the temporal boundaries of the analysis.For sold products,such as mobile handsets,it may be assumed that a refurbished handset is a perfec

310、t substitution for a newly manufactured mobile in the emissions inventory because the operator has sold a refurbished mobile instead of a newly manufactured one.The fact that the expected duration of use may be 2 years versus 3 years for the newly manufactured mobile could be disregarded,as there is

311、 no guarantee that after 3 years the operator would sell 50%more mobiles as customers return to replace their refurbished mobile with an increased cadence.Box 4 Matching Project-Based Calculations to Inventory Procedures It should be noted that in some cases,the methods used for the Counterfactual S

312、cenario may differ from those used for the Circular Scenario.For example,some operators account for newly manufactured CPE based on product LCAs,using the product-level method,but account for emissions from their refurbishment partner based on economic activity with the supplier,using a supplier-lev

313、el allocation method.This is often a decision made during the Inventory Accounting process to maximise the data quality of the inventory.In this case,it is recommended to reflect the inventory procedures within the Project-Based calculation for the purposes of this specific exercise,to faithfully re

314、flect the impact of circular initiatives as they would appear within the inventory.If data is available,practitioners may wish to carry out a parallel,secondary calculation showing the results based on more specific data.Where this gives a more accurate result,changes to the overall inventory proced

315、ure can be considered based on this evidence,and if these changes are applied to the organisations inventory accounting procedures,these can then be reflected in the primary calculation provided to stakeholders regarding the inventory reductions from the circularity initiative.41 For active network

316、equipment deployed in own operations,however,it is more problematic to disregard the substitution rate of a shorter expected duration of use.This is because if a server is expected to last 5 years when purchased as newly manufactured,but only 3 years when purchased as refurbished,it is reasonable to

317、 assume that the operator will need to purchase 1.7 refurbished units to meet its needs over the next 5 years.This would lead to Category 1 impacts of x1.7 reprocessing and transportation emissions,versus Category 1 impacts of x1 newly manufactured unit production and distribution emissions.Inventor

318、y savings reported should therefore be adjusted accordingly,based on the unique scenario,the ownership-deployment model and the associated inventory procedures,and the temporal boundaries of the analysis.Once the overall emissions of each scenario have been scaled appropriately,based on expected uni

319、t volumes adjusted for any relevant substitution impacts,the resulting emissions can be allocated to the appropriate emissions inventory Scopes and Categories.The emissions savings should be allocated based on Inventory Accounting procedures for each ownership-deployment model.For example,for mobile

320、 handsets sold to customers,production and upstream transportation impacts are typically allocated to Category 1,forward logistics to Category 4,expected duration of use to Category 11,and EoLT to Category 12.For active network equipment,production and upstream transportation impacts are typically a

321、llocated to Category 1,EoLT impacts in Category 5,and usage impacts are reflected within Scope 1 and 2.In this way,expected emissions from each scenario and the associated savings can be presented in terms of their simulated impact on each emissions Scope and Category within the inventory.Please ref

322、er to section 6.Inventory Accounting:Scope 1,2 and 3 Impacts of Circularity for more detailed discussion of inventory allocation procedures in the context of circular initiatives.10.2 Reporting Inventory Savings from Circular Initiatives Once allocated,the overall analysis can be presented to stakeh

323、olders to support decision-making,appraisals and planning activities related to the role of circular initiatives in reducing an operators overall carbon footprint.In practice,although past GSMA analysis has shown that mobile refurbishment could make a 7%contribution to operators near-term reduction

324、targets,the overall savings operators can expect from product lifetime extension via circular initiatives will vary depending on the types and quantities of product refurbished,the emissions intensity of the refurbishment operation,the usage intensity of the refurbished product,the extent to which r

325、efurbished products substitute newly manufactured products(the level of equivalence),and the specific measurement and allocation procedures applied to account for products within the emissions inventory.Operators can refer to the simplified Excel Model accompanying this paper to perform a practical

326、application of this analysis for their specific products.42 Annex A:Worked Examples and Typical Savings Introduction and Overview In this annex,the recommendations outlined in the guidance(including the recommended boundaries and allocation procedure)are applied to circular initiatives within mobile

327、s,CPE and active network equipment,to display indicative savings per product category.Results are displayed across Inventory Accounting and Project-Based Accounting approaches and key influencing factors are highlighted.The intent is to provide a general understanding of the level of savings that co

328、uld be expected from refurbishment and repair initiatives.This is supported by an accompanying Excel Model,which is likewise based on the principles covered in this guidance.The Excel model structures user inputs and generates indicative emissions savings.The savings generated by the model are then

329、translated into the Inventory and Project-Based Accounting approaches,as well as Simulated Inventory Savings.This model can be leveraged if users want to further understand the recommended calculation methods,create specific scenarios,model savings in a granular way(for example,by LCA stage)to make

330、detailed estimations,or develop a set of results for different product lines that can be combined to model forward inventory reductions.A.1 Mobile Handset Refurbishment A.1.1 Mobile Refurbishment Case From interviews with operators and desk-based research,currently,a newly manufactured mobile handse

331、t is typically estimated to have an average use duration of 3 years,40 and a refurbished handset a duration of 2 years.41 The refurbishment burden used in studies is an average of observed reprocessing procedures;in some cases,a clean is all that is needed,in others,a screen and battery replacement

332、takes place.Refurbishment generally happens locally;products are typically not sent back to the Original Equipment Manufacturer(OEM).For the purposes of the savings calculation,we assume the mobiles are sold and the use-phase is based on an average European regional grid factor.A.1.2 Typical Carbon

333、Impacts from Mobile Refurbishment Inventory Accounting(sold products):1 x Newly manufactured product=approx.73 kg CO2e across Scope 3 Categories 1,4,11 and 12.1 x Refurbished product=approx.8 kg CO2e across Scope 3 Categories 1,4,11 and 12.Project-Based Accounting:40 https:/eeb.org/revealed-the-climate-cost-of-disposable-smartphones/41 https:/librairie.ademe.fr/dechets-economie-circulaire/5833-ass